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Money lessons from Mom

My investment accounts aren’t quite ready to support me in a style to which I’d like to become accustomed. But according to statistics from the Federal Reserve and other retirement studies, I’m in better shape than most people my age, who in 2010 had only $120,000 in their retirement accounts.

For this I can credit hard work, a good education and luck. Mostly, I can thank my mom.

Her example was my lesson plan. A child of the Depression, and later a single parent, Mom kept a beady eye on her bank account. At a time when the typical mother worked inside the home, mine worked outside it as well, usually as a full-time executive secretary (what we now call an administrative assistant). She saved some portion of every paycheck to squirrel away for retirement, disasters and splurges — usually new Easter dresses for my sisters and me.

She invested in quality. The furniture in our home was custom-made from walnut, ordered and paid for piece by piece as she had enough money.

She used credit cards but paid them off completely every cycle — after first checking every receipt against the statement.

She shopped at three different groceries (gas was cheap) to stretch $20 into a week’s worth of healthy meals for a family of five. That would be quite a feat today, even on the 2013 equivalent of $143. The only dinners out were church cover-dish suppers.

My “mom-money” lessons don’t seem to have been unique. When asked what they’d learned about managing money from their mothers and grandmothers, members of the South Florida Public Insight Network had plenty to say.

Tracy Towle Humphrey of Miami Beach remembers cutting out coupons from the Sunday newspaper with her mom and being encouraged to save for the things she coveted. “As a child I learned to save money for toys I really wanted and the lesson stayed with me as still to this day. ... When I see my son playing with certain toys, I can vividly remember the pride and joy I accomplished as a child saving up my own money to buy the toy.”

Rosa Santana of Hallandale Beach learned to buy clothes that were only truly on sale. One day, she recalls, her mother went to buy a pair of trousers that had been “discounted” — but she noticed the price had been marked up first, so that the “sale” price was the same as the original price on a previous visit. “That taught me to really pay attention,” she wrote.

For Nancy Murphy of Plantation, financial lessons came from her grandmother, who taught her to be “really frugal … I started saving when I was really young and I was able to travel to Europe when I was in high school all on my own savings. I started in my employer’s 401(k) immediately and have managed to always save over time.”

Jeffrey Weinstock of Miami Beach recalls going with his mother to open his first savings account — “a really big deal. Mom took me to the local bank branch...where they told me that I would be paid real money (!) for keeping my money in the bank and it would grow over time.”

Several women wrote about being encouraged to keep accounts of their own, separate from their husbands. Some disclosed to their mates; others had good reason to keep it a secret.

And Ina Topper of Miami Beach wrote that her mom “was a genius when it came to finances. Not yet 5 years old, Mom gave me a quarter (in pennies) every week AND 5 little wooden boxes in which to put the pennies as I pleased. With it came the explanation, in very basic terms, of how to budget.” On each box she drew a picture of what the purpose for the savings, such as a particular toy or holiday family gifts.

But her biggest lesson, she says, came after she begged for a four-week allowance advance to buy a special toy — and then left the toy on the bus. “Years later, my mom still reminded me, ‘You did NOT so much cry because you lost the toy, but more so, as you kept saying, that the worst thing was NOT to get any more spending money for the next 4 weeks.’ ”

Moms, it turns out, are still key players when it comes to financial literacy. According to a 2011 survey conducted by Angus Reid Public Opinion for TD Bank, mothers are responsible for teaching children how to count money in 81 percent of the families surveyed. They also teach about money while shopping (70 percent) and saving money in a piggy bank (70 percent). They’re more likely to feel a need for budgeting than dads; dads are more likely to set allowances and savings goals for their children.

In money, as in all matters, not all parental lessons produce the desired results. A series of studies released around 2010 pegged Generation Y (those born in the 1980s and 1990s) as “narcissistic,” “entitled” and “the me generation.” Accustomed to being praised constantly, people born in this period, suggest the studies, often expect high salaries but don’t always understand the need for hard work.

Of course, you can’t paint an entire generation with a single swipe. And the economic downturn may have tempered such attitudes among those who perhaps previously held them. But a recent conversation with a group of boomer-generation parents of adult children sounded a refrain I’ve heard often in Miami. All were professional families who had given their children a solid footing: fully paid educations, cars, the occasional trip abroad.

Yet, said one dad, “I’m not sure we really did our children a favor by giving them so much.” The surprise was that this came not from the parent of the thirtysomething daughter who never has supported herself, or from the father of the late bloomer, but from the parent of two children who are quite successfully employed.

His concerns aren’t unique.

Whether it’s a matter of early financial learning or the recent economy, evidence suggests that the children of baby boomers will enjoy less financial security than their parents. That uncertainly persists even among affluent households with $100,000-plus investable assets, according to a study conducted by GfK Roper Public Affairs in November and December of 2011 for Ameriprise Financial. Only 40 percent of those surveyed in generations X and Y were confident they could assure a financially secure life for themselves and their families. Only 20 percent were confident they would be able to continue their current lifestyle into retirement.

For myself, I can say that though some of the financial lessons from mom weren’t much fun, they have served me well.

My parents divorced when I was in my teens. By then I was working in the local drugstore after school each day. When it came time for college, I cobbled together scholarships, earnings from a work-study program and modest parental contributions. Campus lectures, frat parties and viciously contested basketball games provided free entertainment, and I graduated from Duke University without debt.

I don’t remember what my dad gave me to mark the occasion. My mom, true to form, presented me with 250 shares of stock.

Her chief goal in life, she often said, was to die without being a financial burden to her children — a lesson she learned from her own mother. With a small inheritance from Granny, Mom invested smartly, poured over the pages of Barron’s. She knew the phone numbers of her stockbroker and the credit union manager by heart. She splurged on trips to Vegas, careful to play only with a pre-determined amount and, once she hit a streak, to set aside her initial investment; she nearly always came back from the quarter slots with enough in her pocket to cover the full cost of her trip.

And though she never earned more than today’s equivalent of about $40,000 per year, Mom died with enough money in her accounts to move her own children well on their way to financial security.

Of course, we already were on the right path. To a one, we save part of every bit of money that comes our way. We’re all work-obsessed. We know the difference between marketing and true value, and we always, always compare prices — something that drives my husband mad.

Though I don’t always pay off my credit card balance every month, I’ve stashed away more than enough to wipe them clean on any day of the week. For years I lived in a series of tiny apartments to save enough money for my first condo. Living within my means has made it possible for me to splurge on my addiction for traveling. Last stop: the Old Silk Road in Uzbekistan.

Mom would have understood. After all, that’s what the piggy bank is for. Just as long as the bills are paid first.

Jane Wooldridge is The Miami Herald’s executive business editor. This article includes comments from the Public Insight Network, an online community of people who have agreed to share their opinions with The Miami Herald. Sign up at MiamiHerald.com/Insight.

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